New South Wales has two overlapping state energy rebate schemes that together deliver some of the largest household discounts in Australia: the Energy Savings Scheme (ESS) and the Peak Demand Reduction Scheme (PDRS). Between them, NSW homeowners and renters can access thousands of dollars off heat pumps, air conditioners, and — as of late 2024 — home batteries. Here's how the NSW Energy Savings Scheme works, what the ESS rebate covers, and how to stack it with federal programs for maximum savings.
The Two Schemes: ESS and PDRS
The NSW energy rebate landscape has two distinct legs, and it's worth understanding both because they target different activities.
- Energy Savings Scheme (ESS): Running since 2009, the ESS creates Energy Savings Certificates (ESCs) for activities that reduce overall electricity consumption — such as installing a heat pump hot water system or replacing an old air conditioner with a more efficient one. One ESC represents one MWh of electricity saved.
- Peak Demand Reduction Scheme (PDRS): Launched in 2022, the PDRS creates Peak Reduction Certificates (PRCs) for activities that reduce or shift electricity use away from peak times. Since November 2024, this includes home batteries and Virtual Power Plant connections.
Both schemes are overseen by IPART (the Independent Pricing and Regulatory Tribunal). Electricity retailers have legislated targets to surrender ESCs and PRCs each year, which creates a market value that Accredited Certificate Providers (ACPs) capture and pass through to you as an upfront discount.
What the ESS and PDRS Cover
The combined product list has broadened steadily. Typical eligible upgrades for NSW households include:
- Heat pump hot water replacing electric or gas storage (ESS)
- Reverse cycle air conditioners (ESS, and PDRS for high-efficiency units)
- Home batteries including standalone and retrofit to existing solar (PDRS from Nov 2024)
- Virtual Power Plant (VPP) connection bonus for batteries that commit to a VPP
- Pool pump upgrades to variable speed (ESS)
- Commercial and residential LED lighting (ESS)
- Refrigerator decommissioning and some appliance upgrades (ESS)
Typical Household Discounts
Actual discounts depend on the certificate market price, the size of the installation, the postcode climate zone, and the efficiency gain over the replaced equipment. Here's what most NSW households can expect right now:
| Upgrade | ESS / PDRS Rebate | Stack With Federal? | Indicative Net Cost |
|---|---|---|---|
| Heat pump hot water (300L, electric replacement) | $800–$2,000 (ESS) | Yes — STCs add $500–$1,100 | $1,000–$2,500 |
| Reverse cycle split system 5–7 kW | $300–$900 (ESS) | No | $1,800–$3,400 |
| Home battery 10 kWh (PDRS) | $1,400–$2,800 | Yes — Cheaper Home Batteries adds ~$3,000–$3,500 | $5,500–$9,000 |
| Home battery 13 kWh (PDRS) | $1,800–$3,600 | Yes — Cheaper Home Batteries adds ~$3,900–$4,500 | $7,500–$12,000 |
| VPP connection bonus (per battery) | $250–$500 (PDRS) | Additional to battery rebate | Paid to consumer |
| Pool pump upgrade | $200–$500 (ESS) | No | $500–$1,500 |
How to Actually Claim the Rebate
You don't apply for ESCs or PRCs directly. Instead, you buy your upgrade through an Accredited Certificate Provider — a business registered with IPART to create and trade certificates. The ACP handles all paperwork and deducts the rebate from your invoice upfront.
The process looks like this:
- Check the IPART register (ipart.nsw.gov.au) to find ACPs accredited for the activity you want
- Get at least two quotes that itemise the ESS or PDRS discount separately from the product cost
- Confirm the product model is on the eligible product list for that scheme
- For batteries, confirm whether the installer is offering the VPP connection bonus and what VPP they partner with
- Sign the certificate assignment form — this transfers the rights to create certificates to the ACP in exchange for the discount
- Installation occurs, and the net discounted price is what you pay
Stacking With Federal Rebates
NSW rebates generally stack cleanly with federal programs — and that's where the biggest savings come from:
- Heat pump hot water: ESS rebate + federal STCs. Combined discount can exceed $2,500 on a quality unit, often reducing net cost to under $1,500.
- Home batteries: PDRS rebate + federal Cheaper Home Batteries Program rebate (roughly $330/kWh usable in 2026). A 13 kWh battery can attract combined rebates of $5,700–$8,100.
- Solar PV: Federal STCs still apply (no separate NSW rebate for solar PV for most households).
- Low Income Household Rebate: A separate $285/year bill credit for eligible concession card holders — doesn't reduce upgrade costs but helps with ongoing bills.
Eligibility and Who Qualifies
The ESS and PDRS are broadly accessible with only a few conditions:
- The property must be in NSW and connected to the electricity grid
- The upgrade must be installed by an Accredited Certificate Provider or sub-contractor working for one
- The product must be on the scheme's approved product register
- For batteries, the household typically needs existing solar PV (or installs it at the same time), plus an eligible inverter and smart meter
- You can only claim one rebate per activity per site — replacing a heat pump with another heat pump doesn't attract a new ESC in most cases
Apartments and Renters
Renters and unit dwellers have fewer, but still meaningful, options:
- Renters can access ESS or PDRS upgrades with written landlord consent. The owner retains the asset; the tenant benefits from lower bills. Many landlords agree because the upgrade effectively costs them little or nothing thanks to the rebate.
- Apartment owners can install eligible heat pump hot water, air conditioners, and batteries (where strata allows) and claim the full rebate.
- Strata committees can sometimes access rebates at scale for shared systems — pool pumps, lighting, and common area HVAC — through commercial ACPs.
- Concession card holders in NSW also qualify for the Low Income Household Rebate and Gas Rebate, which stack with ongoing bill discounts.
Timing and What to Watch
PDRS certificate prices have been high since the battery activity launched, but IPART reviews scheme settings regularly. Rebate values can move up or down as new activities are added and targets change. There's also a natural supply-demand effect: as more households install batteries, PRCs become more abundant and each one is worth less.
If you've been planning a battery install or heat pump upgrade, the current combined rebate environment is historically favourable. Waiting for "better" rebates often means waiting for a worse one.
See Every Rebate You Qualify For
The ESS rebate NSW households can claim is just one of many. Federal STCs, the Cheaper Home Batteries Program, Low Income Household Rebate, and utility-level discounts can all stack for the right household. Our Rebate Finder runs through every rebate available based on your postcode, household type, and upgrade plans, so you know exactly what you'll pay net of all available discounts before you sign a quote.